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IC 8889 



Bureau of Mines Information Circular/1982 



Manganese Availability— Domestic 

A Minerals Availability System Appraisal 



By Catherine C. Kilgore and Paul R. Thomas 



tf@L 



UNITED STATES DEPARTMENT OF THE INTERIOR 



Information Circular 8889 

Manganese Availability— Domestic 

A Minerals Availability System Appraisal 
By Catherine C. Kilgore and Paul R. Thomas 




UNITED STATES DEPARTMENT OF THE INTERIOR 
James G. Watt, Secretary 

BUREAU OF MINES 
Robert C. Horton, Director 



As the Nation's principal conservation agency, the Department of the 
Interior has responsibility for most of our nationally owned public lands 
and natural resources. This includes fostering the wisest use of our land 
and water resources, protecting our fish and wildlife, preserving the 
environmental and cultural values of our national parks and historical 
places, and providing for the enjoyment of life through outdoor recreation. 
The Department assesses our energy and mineral resources and works to 
assure that their development is in the best interests of all our people. The 
Department also has a major responsibility for American Indian reserva- 
tion communities and for people who live in island territories under U.S. 
administration. 



1 













This publication has bean cataloged as follows: 



Library of Congress Cataloging in Publication Data 




Kilgore, C. C. (Catherine C.) 




Manganese availability-domestic. 




(Information circular; 8889) 




Bibliography: p. 12 




Supt. of Docs. no. : I 28.27: 




1. Manganese ores-United States. 2. Manganese. I. Thomas, Paul R. 
III. Series: Information circular (United States. Bureau of Mines) : 8889 


II. Title. 


TN296.U4 . 622s [563.4'629] 
[TN490.M3] 


82-600167 

AACR2 



do 

J iii 






PREFACE 



The purpose of the Bureau of Mines Minerals Availability Program is to assess the 
worldwide availability of nonfuel minerals. The program identifies, collects, compiles, and 
evaluates information on active, developed, and explored mines and deposits, and on 
mineral processing plants worldwide. Objectives are to classify domestic and foreign 
resources, to identify by cost evaluation resources that are reserves, and to prepare 
analyses of mineral availabilities. 

This report is part of a continuing series of Minerals Availability System (MAS) reports 
that analyze the availability of minerals from domestic and foreign sources and the factors 
that affect availability. Analyses of other minerals are currently in progress. Questions 
about the MAS program should be addressed to Director, Division of Minerals Availability, 
Bureau of Mines, 2401 E Street, N.W., Washington, D.C. 20241. 



; 



fc 



For sale by the Superintendent of Documents, U.S. Government Printing Office 
Washington. D.C. 20402 



IV 

CONTENTS 

Page Page 

Preface Hi Availability of domestic manganese 8 

Abstract 1 Land-based deposits 8 

Introduction 2 Manganese nodules as an alternative resource . 9 

Acknowledgments 3 Sensitivity analyses 9 

Estimation of domestic manganese resources 3 Impact of beneficiation costs 9 

Domestic manganese deposit evaluations 5 Impact of transportation costs 9 

Capital and operating costs 5 Impact of changes in byproduct prices 10 

Beneficiation methods and associated costs 5 Impact of State severance taxes 10 

Flotation 5 Conclusions 11 

Ammonium carbamate leach 5 References 12 

Economic analysis 6 Bibliography 12 

Domestic demand and import dependence 7 Appendix A. — Description of the deposits 13 

Appendix B. — Proposed mining methods 14 

ILLUSTRATIONS 

1 . Locations of evaluated domestic manganese resources *. . 2 

2. Reserve base and inferred reserve base classification categories 3 

3. Annual production of domestic manganese for selected years at various prices 8 

4. Annual production of domestic manganese through the year 2000, priced below $35 per long ton unit, 

in March 1981 dollars 8 

TABLES 

1 . Domestic manganese deposit information and proposed mining and milling data 4 

2. Domestic manganese deposit descriptions 4 

3. Domestic manganese resource information 4 

4. Typical capital and operating costs for domestic manganese operations 6 

5. Commodity prices used in the economic analyses 6 

-*6. U.S. imports of manganese ore and ferromanganese, 1970-80 7 

7. Government stockpile for manganese, status as of November 30, 1981 7 

-^>8. Manganese stocks and consumption for 1 980 and 1 981 8 

9. Impact of transportation costs on the incentive prices for domestic manganese 10 

10. Changes in manganese incentives prices as a result of changes in byproduct prices from March 1980 

to March 1981 10 

1 1 . Changes in incentive prices for manganese as a result of differing State severance taxes 10 



MANGANESE AVAILABILITY— DOMESTIC 
A Minerals Availability System Appraisal 

By Catherine C. Kilgore 1 and Paul R. Thomas 2 



ABSTRACT 

The Bureau of Mines investigated the availability of manganese from known domestic 
occurrences. Eight of these deposits were found to have demonstrated resources totaling 
420 million metric tons with an average grade of 10 percent contained manganese. They 
were found to be submarginally subeconomic. 

Economic evaluations of the eight deposits resulted in incentive prices ranging from $8 
to almost $35 per long ton unit (22.4 pounds) of contained manganese. Comparing these 
prices with the current market value of $1.70 per long ton unit of manganese clearly 
illustrates the submarginal nature of the domestic ores analyzed. These domestic 
resources would probably not be developed except in the case of an extreme national 
emergency. 

Production from the eight deposits would take 3 to 6 years to develop, and the final 
product would be manganese ore concentrate, which could be used in the production of 
ferromanganese. If preproduction development began in 1981, annual production would 
peak in 1987 with 900,000 metric tons of recoverable manganese. Thereafter, production 
would see a steady decline unless additional resources were located or technologic 
improvements were made to allow processing of lower grade material, or unless mining 
and processing of ocean manganese nodules began to take place. 

1 Geologist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 

2 Economist, Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 



INTRODUCTION 



The availability of domestic sources of manganese is of 
vital concern to the United States. Presently, 98 percent of 
the manganese consumed in this country must be imported; 
most of the remaining 2 percent is consumed in the form of 
low-grade manganiferous ore used primarily in iron blast 
furnaces or to color brick. Manganese is a critical raw 
material, 90 percent of which is consumed by the steel 
industry either in the form of ore or as ferroalloys. It is also 
used as an oxidant for various chemical processes and as a 
depolarizer for dry cell batteries, and the metal is used to 
prepare alloys with aluminum and copper. 

The purpose of this report is to identify domestic 
resources and evaluate potential manganese production 
from these resources. The availability of domestic re- 
sources, which might be needed to replace foreign imports 
during a period of supply interruption, is critical to the 
formulation of a national minerals policy. 

This report expands upon work that was done by the 
National Materials Advisory Board in their 1976 report on 
Manganese Recovery Technology (8). 3 Their report covered 
the possible recovery technologies available for the proc- 
essing of domestic manganese, but it did not deal with the 
economic availability of domestic resources. Additional work 
done by the Bureau of Mines on domestic manganese 
resources and processing has been cited in the bibliography 
section at the end of this report. 

This study looks at the engineering and economic 
availability of manganese from eight domestic deposits. The 
names and locations of these deposits are shown in figure 
1. The procedure for conducting this study was to identify 
and define demonstrated manganese resources and the 
engineering and economic parameters that would affect 

3 Italicized numbers in parentheses refer to items in the list of references 
preceding the Bibliography. 



proposed production from the selected deposits. Capital 
investments and operating costs for the appropriate mining 
and beneficiation methods were estimated, and a cost 
analysis for each deposit was performed. Sensitivity analy- 
ses were performed to determine the impact of various 
parameters, such as the different costs for beneficiation 
methods and transportation, upon the economic status of 
each deposit. The impact of State severance taxes and 
benefits of byproducts, where applicable, were also 
analyzed. 

There has been no manganese ore, concentrate, or 
nodule containing 35 percent or more manganese produced 
or shipped within the United States since 1973. However, 
there are several low-grade domestic deposits that are 
currently mined for their manganese or combined manga- 
nese and iron content. They were not included in the 
domestic availability analysis because they are used directly 
either as low-grade feeds to iron blast furnaces or as 
pigments, and they do not have a price comparable to 
manganese ore or ferromanganese products currently on 
the market. 

Other manganese resources were excluded from this 
analysis because the tonnages were inferred rather than 
demonstrated, 4 or because of technologic problems in 
producing a marketable product. Domestic deposits ex- 
cluded from this study include Cuyuna South Range, Emily 
District, and all but the central southwest portion of the 
Cuyuna North Range, Minn., Batesville and Mena Districts, 
Ark., and small deposits in California, Georgia, Montana, 
Nevada, New Jersey, New Mexico, South Carolina, Tennes- 
see, and Utah. 



4 Figure 2 shows reserve base and inferred reserve base classification 
categories. 




North Aroostook 
District 
Maple Mt- 
Hovey Mt. 



FIGURE 1 Locations off evaluated domestic manganese resources. 



ACKNOWLEDGMENTS 



Production and cost data for the deposits analyzed in this 
study were developed at the Bureau of Mines Field 
Operations Centers in Denver, Colo., Pittsburgh, Pa., and 
Spokane, Wash. Further extensive costing, as well as the 



financial evaluations of the properties, and preparation of 
this report were performed at the Minerals Availability Field 
Office in Denver. 



ESTIMATION OF DOMESTIC MANGANESE RESOURCES 



The reserve base is the in situ portion of demonstrated 
(measured plus indicated) resources from which reserves 
are estimated. 5 It includes those resources that are currently 
economic (reserves) or marginally economic (marginal 
reserves) and a portion of the subeconomic (resources). For 
most mineral commodities, the appropriate resource param- 
eters can be specified according to the objectives of the 
estimators. The position of the lower boundary of the 
reserve base, which extends into the subeconomic cate- 
gory, is variable depending upon the specified objectives. 
The reserve base encompasses those portions of the 
resource that have a reasonable potential for becoming 
economically available within planning horizons beyond 
those that assume proven technology and current econom- 
ics. 

Selection of deposits for this study was limited to known 
deposits with demonstrated manganese resources. Be- 
cause of their subeconomic nature, these deposits were 
used to establish the available domestic manganese 
resources, rather than a domestic reserve base. The 
position of the reserve base within the classification of 
mineral resources is illustrated in figure 2; the crosshatched 
portion indicates the approximate location of the domestic 
manganese resources. The deposits are considered to be 
submarginal — that portion of subeconomic resources requir- 



5 The reserve base is defined according to the mineral resource-reserve 
classification system developed jointly by the U.S. Geological Survey and the 
Bureau of Mines {13). 



ing greater than 1.5 times the current price or a major 
cost-reducing advance in technology in order to be 
considered for development (9). 

Eight domestic deposits were selected for analysis in this 
study (fig. 1). Domestic deposit information and proposed 
mining and beneficiation data are listed in table 1, and a 
brief description of each deposit and its products is given in 
table 2. More detailed descriptions of the deposits can be 
found in appendix A. 

The eight domestic deposits evaluated for this study have 
total demonstrated resources of almost 420 million metric 
tons, with an average grade of about 10 percent contained 
manganese. Resource information for these deposits is 
given in table 3. 

This study is based on current resource estimates, proven 
and experimental technology, and constant March 1981 
prices and costs. As exploration and development yield 
additional information on grades and tonnages, and as the 
difference between production costs and market prices 
changes, portions of the resources may be reclassified. 
Technologic improvements that enable the mining and 
processing of lower grade materials and the processing of 
materials previously considered waste will also have an 
impact on the economic classification of these resources. 
However, recent research to develop more cost-effective 
methods for the beneficiation of low-grade ores has been 
largely nonproductive. Aside from the increased use of 
simple upgrading beneficiation methods, chances for a 
major technological breakthrough in beneficiation methods 
for low-grade ores are unlikely in the foreseeable future (9). 



Cumulative 
Production 



ECONOMIC 



MARGINALLY 
ECONOMIC 



SUB- 
ECONOMIC 



IDENTIFIED RESOURCES 



Demonstrated 



Measured Indicated 



Reserve 



Base 




Inferred 



Inferred 



Reserve 



Base 



UNDISCOVERED RESOURCES 



Hypothetical 



Probability Range 
■(or)- 



Speculative 



+ 



+- 



Other 
Occurrences 



Includes nonconventional and low-grade materials 



FIGURE 2 — Reserve base and inferred reserve base classification categories. (Crosshatched area 

indicates position of domestic manganese resources.) 



TABLE 1. — Domestic manganese deposit information and proposed mining and milling data 1 



Property name 



Status 
of deposit 



Minimum 

lead time, 

years 



Annual 

capacity, 

metric tons 

of ore 


Mining 
method 




Beneficiation 


Method 


Status 


535,500 
327,900 


Room and 
pillar. 
. . . . do . . . 


Leach 2 . . . 
. . . do 2 . . 


Proposed. 

Do. 


635,000 
4,263,000 


Overhand 
shrink- 
stoping. 

Open pit 


Partial 
leach. 3 

Leach 2 . . . 


Do. 
Do. 


2,619,900 


. . . . do . . . 


. . . do 2 . . 


Do. 


3.570,000 

400,000 

1 ,050,000 


. . . . do . . . 

Cut-and-fill 
stoping. 
Open pit, 


. . . do 2 . . 

Flotation" 

. . do 5 . . 


Proposed, semicommercial; 

181 metric tons per day. 
Commercial; 907 metric 

tons per day. 
Commercial; 988 metric 

tons per day. 



Hardshell Mine 
Maggie Mine 
Sunnyside Mine 



Maple Mountain- 

Hovey Mountain. 
North Aroostook District 

(Dudley and Gelot Hill) 
Cuyuna North Range 

(SW portion). 
Butte District (Emma Mine) 

Three Kids Mine 



Arizona 

...do 
Colorado . . . 


Explored 

prospect 
Partially 

developed. 
Developed. . . 


4 
6 
4 


Maine 

.... do . . 


Explored 
prospect 
do ... . 


6 
6 


Minnesota 


Past producer. 


4 


Montana . . 


do ... . 


3 


Nevada 


do ... . 


3 



' Further information on proposed mining methods is given in appendix B. 

2 Ammonium carbamate leach process: proposed based on studies of bench-scale tests on Cuyuna North Range ores, 

3 Sunnyside contains a rhodonite-rhodochrosite mineralization. It was proposed that the rhodochrosite portion could be recovered by an ammonium carbamate 
leach. It is assumed only 50 percent of the manganese is leachable without a quench-leach process. 

J Bulk sulfide flotation process 

5 Emulsion flotation process. Past production of manganese has occurred; some changes in this flotation technology may be incorporated for treatment of 
remaining material. 



TABLE 2. — Domestic manganese deposit descriptions 1 



Property name Major ore minerals 

Hardshell Mine Pyrolusite, braunite, wad. psilomelane, 

silver halides. 
Maggie Mine Psilomelane, wad, manganite, 

pyrolusite. 

Sunnyside Mine Rhodonite, rhodochrosite 



Products 



Comments 



Maple Mountain- 

Hovey Mountain. 
North Aroostook District 

(Dudley and Gelot Hill). 



Cuyuna North Range 
(SW portion). 



Butte District (Emma Mine) 
Three Kids Mine 



Rhodochrosite, braunite, bementite, 
rhodonite, spessartite, hematite. 

Braunite, bementite, manganiferous 
carbonates, hematite. 



Manganiferous limonite, psilomelane, 
manganite. 



Rhodochrosite, rhodonite, pyrargyrite, 
sphalerite, tetrahedrite. 

Wad, psilomelane, pyrolusite. 



66.8 pet manganese, 2 

silver. 
66.8 pet manganese 2 

66.8 pet manganese 2 



66.8 pet manganese/ 

iron. 
66.8 pet manganese/ 

iron. 



66.8 pet manganese, 2 
iron. 



47 pet manganese, 
silver, lead, zinc. 

46 pet manganese 



In Harshaw District; worked sporadically on a small scale. 

Located in the Artillery Peak Area. Estimated total 

identified tonnage of 159 million metric tons; 3.9 pet 

manganese. 
To produce from old gold, lead, and zinc workings; total 

district identified tonnage estimated at 44 million metric 

tons; 8 pet manganese. 
Located in central Aroostook District. 

Forested — environmental factors may be significant. 
Area includes 1 1 additional deposits for a total 

demonstrated tonnage of 63.9 million metric tons; 9 pet 

manganese. Agricultural land — environmental factors 

may be significant. 
Resource estimate for 9 deposits in central southwest of 

North Range; estimated total identified tonnage of North 

Range is 247 million metric tons; average 8 pet 

manganese. 
Produced manganese 1917-59. Additional estimated 

259,000 metric tons for Travona Mine not included owing 

to 1 /2-year life. 
Produced manganese until 1961. Plan to extend old 

workings; Government stockpiles on site. 



1 Further information on domestic manganese resources is given in appendix A and reference 8. 

2 This grade is the manganese grade achieved in the semicommercial carbamate leach-processed Cuyuna North Range ores. This grade of agglomerated 
Mn 3 0^ product would be suitable for ferromanganese production. * 



TABLE 3. — Domestic manganese resource 
information 



Property name 


Grade of 


Demonstrated 


Contained 




contained 


resource 


manganese, 




manganese, 


tonnage, 


metric tons 




percent 


metric tons 




Hardshell Mine 


15.0 


5,895,500 


884,325 


Maggie Mine 


8.75 


8,441,000 


738,588 


Sunnyside Mine 


10.0 


24,909,000 


2,490 900 


Maple Mountain- 








Hovey Mountain 


8.87 


260,000,000 


23,062,000 


North Aroostook District 








(Dudley and Gelot Hill) . 


9.54 


63,100,000 


6,109,740 


Cuyuna North Range 








(SW portion) 


7.84 


48,960,000 


3,838 464 


Butte District 








(Emma Mine) 


18.0 


1,232,000 


221,760 


Three Kids Mine 


13.2 


7,230,000 


954,360 







DOMESTIC MANGANESE DEPOSIT EVALUATIONS 



After a deposit was selected for analysis, an evaluation of 
the property was performed at one of the Bureau of Mines 
Field Operations Centers, in Denver, Colo., Spokane, 
Wash., or Pittsburgh, Pa., as well as at the Minerals 
Availability Field Office in Denver. In order to evaluate the 
proposed operations, the National Materials Advisory Board 
(NMAB) report on Manganese Recovery Technology (8) 
was consulted. Using data contained in the NMAB report 
and current engineering principles, the appropriate mining 
and beneficiation methods, production rates, and other 
parameters of production were estimated. For past-pro- 
ducing properties, previous production information was 
taken into account. Detailed mining information is given in 
appendix B. 

In order to evaluate the economic status of each deposit 
included in this study, capital and operating costs for mining 
and beneficiation were derived for the proposed develop- 
ment of each deposit. 



CAPITAL AND OPERATING COSTS 

Capital expenditures were calculated for exploration, 
acquisition, development, mine plant and mine equipment, 
and for constructing and equipping the concentrator. The 
capital expenditures for the different mining and processing 
facilities include the costs of mobile and stationary equip- 
ment, construction, engineering, infrastructure, and working 
capital. Infrastructure is a broad category that includes costs 
for access and haulage facilities, water facilities, power 
supply, and personnel accommodations. Working capital is 
a revolving cash fund required for operating expenses such 
as labor, supplies, insurance, and taxes. Environmental 
costs, except for those included in the design of processing 
facilities, were not addressed in this analysis. 

All acquisition and exploration costs were based on the 
Field Operation Centers' estimates. The development, mine 
plant and equipment, and mine operating costs were 
derived from the Bureau of Mines capital and operating cost 
estimating system manual (CES) (7), as well as from 
industry sources. 

The total operating cost of a mining project is a 
combination of direct and indirect costs. Direct operating 
costs include operating and maintenance labor and sup- 
plies, supervision, payroll overhead, and utilities. The 
indirect operating costs include technical and clerical labor, 
administrative costs, maintenance of facilities, and research. 
Other costs in the analysis include Federal and State taxes 
and standard deductibles such as depreciation, depletion, 
deferred expenses, investment tax credits, and tax loss 
carry-forwards. 



BENEFICIATION METHODS AND ASSOCIATED 
COSTS 

The majority of ore consumed in ferromanganese produc- 
tion contains approximately 48 percent manganese. Howev- 
er, in order to achieve an ore concentrate grade that can be 
used in the production of ferromanganese from low-grade 
domestic resources, beneficiation methods were employed 
and a product grade of 66.8 percent manganese was 
proposed. This higher grade material may result in a 
"bonus" paid for its higher manganese content per ton, but 
no such "bonus" has been assumed for this study. The 
incentive price obtained for all grades was based on a long 
ton unit (22.4 pounds) of contained manganese. All of the 
manganese produced for this study has been targeted for 
consumption as manganese ore by the ferromanganese 
industry. 



Flotation 

In 1976, the NMAB (8) reviewed the various beneficiation 
processes available for the recovery of manganese from 
low-grade domestic deposits. It was concluded in the 1976 
study that the simplest, least expensive method of beneficia- 
tion was flotation, gravity concentration, and magnetic 
separation, where applicable. The flotation of some manga- 
nese ore has been practiced on a commercial scale. 
Manganese, Inc., at Henderson, Nev., beneficiated manga- 
niferous material from the Three Kids Mine using an 
oil-emulsion flotation process followed by nodulizing, from 
September 1952 until 1961. Anaconda Copper Co., at 
Anaconda, Mont., beneficiated rhodochrosite ore commer- 
cially from the Butte District mines, primarily the Emma 
Mine, using a bulk sulfide flotation process followed by 
nodulizing, until 1959. 

Beneficiation costs for the oil-emulsion flotation process 
proposed for the Three Kids Mine and the bulk sulfide 
flotation process proposed for the Emma Mine were derived 
in part from the CES. Total beneficiation costs for these two 
mines also include operating and capital costs scaled f rom 
cost data obtained from industry sources for calcining and 
nodulizing the manganese concentrates. The large amount 
of diesel fuel required in the emulsion flotation process was 
also taken into consideration and added to the total 
beneficiation operating costs required for the Three Kids 
Mine. 

Ammonium Carbamate Leach 

The Three Kids and Emma Mines are unique for this 
study in that they can be beneficiated by gravity and 
flotation methods. Most of the domestic manganese re- 
sources are not amenable to beneficiation by gravity and 
flotation methods alone. In order to achieve a concentrate 
suitable for ferromanganese production, additional process- 
ing would be necessary. The NMAB recommended the 
possible combination of beneficiation with hydrometallurgi- 
cal processes; however, no work as been done on this 
combination. The NMAB also reviewed the technologic state 
of the art for smelting processes, vapometallurgy and 
hydrometallurgy, and concluded that, based upon the level 
of data to date, the expected costs and adaptability to 
large-scale production of the sulfur dioxide roast process or 
the ammonium carbamate leach process were the most 
viable (8). 

The sulfur dioxide roast process uses almost twice as 
much energy as the ammonium carbamate leach process, 
and energy costs have increased more than any other cost 
since the 1976 report was published. Thus, for this study, 
the ammonium carbamate leach process was chosen over 
the sulfur dioxide roast process for beneficiation of the 
Sunnyside Mine, Cuyuna North Range, Maggie Mine, 
Hardshell Mine, Maple Mountain-Hovey Mountain, and 
Northern Aroostook District manganese-bearing materials. 
Manganese Chemicals Corp., at Riverton, Minn., benefici- 
ated the Cuyuna Range manganiferous protore in a 
semicommercial plant using the ammonium carbamate 
leach process, from 1953 until early 1962. The process has 
been studied on a laboratory scale for treating ores from the 
Three Kids and Maggie Mines, as well. The Riverton plant 
did not recover an iron concentrate from the leach residues; 
however, iron recovery has been proven feasible on a small 
batch scale by the Bureau of Mines. 

The beneficiation operating and capital costs for the 
ammonium carbamate leach process proposed for the 
remaining mines were determined by updating and scaling 
the costs given in the 1976 NMAB report (8). Additional 
capital costs for grinding, magnetic separation of iron, 



TABLE 4. — Typical capital and operating costs 
for domestic manganese operations' 





Thousand metric 


Capital costs. 


Operating costs, 


Operation- 


tons processed 


per annual 


per annual 




per year 


metric ton ore 


metric ton ore 


Mine 








Open pit . . . 


1.000-4.500 


$ 4 00-$ 13 00 


$ 2.00-$ 6.00 


Underground 


300- 650 


600- 4000 


16.00- 24 00 


Mill: 








Flotation 


400-1.000 


3000- 55.00 


2000- 33.00 


Ammonium 








carbamate 








leach 


300- 650 


290.00- 370 00 


25.00- 30.00 


Do 


2.500-4.500 


140.00- 205.00 


24.00- 27.00 



' Costs in March 1981 dollars. 

: Mining and milling operations proposed for each deposit are listed in table 1 



concentrating, and pelletizing, as well as the operating costs 
for recovering pelletized iron concentrates for the Maple 
Mountain-Hovey Mountain, North Aroostook District, and 
Cuyuna North Range manganese ores, were based on cost 
data obtained from industry sources. The ranges of capital 
and operating costs for developing proposed domestic 
manganese deposits are shown in table 4. 



ECONOMIC ANALYSIS 



The Minerals Availability System (MAS) is a continuously 
evolving methodology for the analysis of longrun mineral 
resource availability. An integral part of this system is the 
Supply Analysis Model (SAM) (2) developed by personnel of 
the Bureau of Mines Minerals Availability Field Office. This 
interactive computer system is an effective mathematical 
tool for analyzing the effects of various parameters upon the 
economic availability of domestic and international re- 
sources. 

After the production parameters and costs for the 
development of domestic manganese deposits were estab- 
lished, the SAM was used to perform various economic 
analyses pertaining to the availability of domestic manga- 
nese. The SAM system is a comprehensive economic 
analysis simulator that is used to determine the price of the 
primary commodity required to obtain a specified discounted 
cash flow rate of return (DCFROR). The DCFROR is 
defined as the rate that makes the present value of all future 
revenues equal to the present value of all future costs. 

For this study, a minimum rate of return of 1 5 percent was 
specified when determining a nonproducing property's 
incentive price for the primary commodity manganese ore. 
An incentive price is the price at which a firm would be 
willing to produce the commodity, over the life of the 
operation, and at which it would recover full costs, including 
a 15-percent rate of return on total investments. This rate 
was considered the minimum sufficient to attract new capital 
to the industry. 

The SAM system contains a separate tax records file for 
each State, which includes all the relevant tax parameters, 
under which a mining firm would operate. These tax 
parameters are applied to each mineral deposit under 
evaluation, with the implicit assumption that each deposit 
represents a separate corporate entity. In addition, the tax 
calculation routine allows for the varying of these param- 
eters and calculations, in order to ascertain what effect 
differing State severance taxes have upon the determination 
of the incentive price required for the primary commodity. 

Price tables are maintained for all commodities, byprod- 
ucts, and coproducts that will be relevant to the availability 
analyses, and all byproducts recovered in the analyses are 
considered to be marketable. The SAM system also 
contains a separate file of economic indexes to allow for 
continuous updating of all cost estimates for both producing 
and nonproducing deposits. The byproduct prices used in 
this study are shown in table 5. 

Using the SAM system, detailed cash flow analyses are 
generated for each preproduction and production year of a 
deposit, beginning with the first year of analysis. The initial 



TABLE 5. — Commodity prices used in the 
economic analyses 

Commodity Price, March 1981 

Cobalt $20.00 per pound 

Copper 87 per pound 

Iron 80.50 per metric ton pellets 

Lead 35 per pound 

Nickel 3.45 per pound 

Silver 12.34 per troy ounce 

Zinc 41 per pound 



Source. Reference 11. 



year of analysis for this study was 1981 . Upon completion of 
the individual analyses, all properties that had been 
identified for inclusion in the study were simultaneously 
analyzed and aggregated onto an availability curve. This 
curve is a tonnage-price relationship that shows the 
recoverable product available at determined longrun prices 
and given rates of return. It is an aggregation of total 
production potential that would eventuate over the entire 
producing life of each deposit at its average total cost of 
production. For this study, annual availability curves were 
constructed to account for the time lags involved in 
achieving the total production potential. These curves are 
simply the total availability of domestic manganese dis- 
aggregated on a yearly basis. 

Certain assumptions are inherent in these curves. First, 
all deposits produce at full operating capacity throughout the 
productive life of the deposit. Second, each operation is able 
to sell all of its output at the determined price 6 and obtain at 
least the minimum specified rate of return. Third, all 
preproduction development of each deposit began in 
January 1981. 

Additional assumptions incorporated in this study were 
based upon the need to determine the potential availability 
of domestic manganese under an emergency situation. As a 
result, the additional time lags and potential costs involved 
in filing environmental impact statements, receiving required 
permits, financing, etc., have not been included in the 
analyses. The preproduction period allows only for the 
minumum engineering and construction period necessary to 
initiate production under the proposed development plan. 



6 Since price equals average total cost (which includes an assumed normal 
rate of return), the price-cost differential equals zero and there are no 
abnormal profits in an economic sense. 



DOMESTIC DEMAND AND IMPORT DEPENDENCE 



Current demand in the United States for all forms of 
manganese is approximately 1.4 million metric tons, with an 
expected annual growth rate of 1 .6 percent annually through 
the year 2000 (4). Since presently there are no suitable 
substitutes for manganese in the iron and steel industries, 
demand and, subsequently, prices for manganese are 
dependent upon steel production levels. Worldwide demand 
for manganese is expected to increase substantially in the 
future, and it is important that the United States secure a 
reliable source of manganese to avoid supply interruptions. 

As of March 1981, imported metallurgical manganese ore 
averaging 46 to 48 percent manganese continued to be 
quoted in the 1980 price range of $1.66 to $1.75 per long 
ton unit contained manganese, delivered to Pittsburgh or 
Chicago. Standard high-carbon ferromanganese with 78 
percent contained manganese, produced in the United 
States, had list prices of $490 and $530 per long ton of 
alloy, while foreign-produced ferromanganese imported to 
Pittsburgh or Chicago was quoted as selling between $390 
and $425 per long ton of alloy (5). 

The United States has become increasingly more de- 
pendent upon ferromanganese imports over the last decade 
as the major ore-producing countries have increased their 
ferromanganese capacities to take advantage of the 
additional value added in their exports. Transportation costs 
favor production of ferromanganese near the source of ore, 
and the rising costs of labor, capital, energy, and pollution 
control in the United States have also encouraged increased 
ferromanganese imports (9). 



The shift to ferromanganese imports versus ore imports 
during the 1970's is shown on table 6. This table indicates 
that during the last decade the percentage of imports of 
ferromanganese to this country has increased, while the 
percentage of manganese ore imports has declined (3). In 
1980, the United States imported approximately 41 percent 
of its manganese in the form of manganese ore with a 
minimum grade of 35 percent contained manganese (10). 
Most of the ore originated in Australia, South Africa, and 
Gabon. The remaining 59 percent of the manganese 
imported was mainly from South Africa and France in the 
form of ferromanganese, which is the final product of the 
majority of ore shipped to this country. For this study, the 
product of the proposed domestic operations, ore concen- 
trate, is targeted to replace only losses in the U.S. supply of 
manganese ore, not losses in ferromanganese. 

If the United States were to develop the proposed 
domestic operations, sufficient domestic refinery capacity 
would have to be maintained in order to process the 
domestic ores to ferromanganese. The shift away from 
importing ore has resulted in the reduction of our ability to 
produce ferromanganese domestically in the volume that 
would be required to support steel production, and this, 
together with rising costs, has made the United States more 
dependent upon foreign sources of ferromanganese. 

Table 7 outlines the current status of the Government 
stockpile for manganese, and, as the table indicates, the 
majority of the manganese in the stockpile is in the form of 
metallurgical grade ore. Table 8 shows the statistics for 



TABLE 6. — U.S. imports off manganese ore and ferromanganese, 1970—80 



Ore imported 

Year Total Mn content 

metric tons pet 1 metric tons pet 2 

1970 1,573,695 79.2 ~~ 767,962 ~~ 48.8 

1 971 1 ,736,237 83.2 850,877 49.0 

1972 1,469,569 74.3 718,974 48.9 

1973 1 ,369,382 70.4 655,635 47.9 

1974 1,111,105 64.4 537,686 48.4 

1975 1,427,659 70.0 694,336 48.6 

1976 1,194,348 60.9 588,865 49.3 

1977 844,369 52.2 411,985 48.8 

1978 496,873 34.4 252,338 50.8 

1979 453,302 27.6 220,903 48.7 

1980 628,512 4_U 300,352 47.8 

' Percent of total U.S.. imports (ore and ferromanganese) attributed to ore. 

2 Percent manganese contained in total gross weight of imported ore. 

3 Percent of total U.S. imports (ore and ferromanganese) attributed to ferromanganese. 

4 Percent manganese contained in total gross weight of imported ferromanganese. 

Source: References 3 and 10. 



Ferromanganese imported 



Total 




Mn content 




metric tons 


pet 3 


metric tons 


pet" 


263,888 


20.8 


201,870 


78.0 


220,200 


16.8 


171,659 


78.0 


316,125 


25.7 


249,168 


78.8 


354,063 


29.6 


275,607 


77.8 


382,048 


35.6 


297,382 


77.8 


360,271 


30.0 


278,132 


77.2 


487,430 


39.1 


378,612 


77.7 


484,722 


47.8 


377,385 


77.9 


617,122 


65.6 


481,795 


78.1 


744,840 


72.4 


579,332 


77.8 


550,434 


58.9 


430,259 


78.2 



TABLE 7. — Government stockpile for 
manganese, status as of November 30, 1981 

(Thousand metric tons) 

Material Goal Total Authorized for Sales, 1 1 

inventory 1 disposal months 

Battery: 

Natural ore 56 168 41 9 

Synthetic dioxide 23 3 

Chemical ore 1 54 200 46 

Metallurgical ore 2,450 2,185 

Ferromanganese: 

High carbon 398 544 

Medium carbon 26 

Silicomanganese 22 

Electrolytic metal 13 rj 

1 In addition to data shown, the stockpile contains 30,838 metric tons of 
natural battery ore and 871,627 metric tons of metallurgical ore, both of 
nonstockpile grade. 

Source: Reference 7. 



manganese consumer and producer stocks and consump- 
tion levels for 1980 and 1981. Current Government and 
industry stocks of metallurgical grade ore total 2,974,000 
metric tons. With the present annual consumption of 
manganese ore estimated at 975,000 metric tons, present 
stockpiled supplies would last approximately 3 years. The 
stockpiled manganese ore, which would be used primarily 
for the production of ferromanganese during a period of 
supply interruption, would require adequate ferromanga- 
nese processing capacity in order to be utilized for domestic 
production and consumption. 

Rising costs, particularly in the energy-intensive pollution 
control systems required for the domestic ferroalloy plants, 
have resulted in the divestiture of a number of plants owned 
by U.S. companies. Although the U.S. companies have 
found the ferroalloy plants not to be cost effective, certain 
foreign ferroalloy companies have discovered that the 
U.S. -based plants are advantageous for the production of 
ferromanganese aimed at U.S. markets. 



TABLE 8. — Manganese stocks and consumption 
for 1980 and 1981 

Statistics 1980 1981° 

Producer and consumer stocks, thousand metric 
tons 

Manganese ore' 934 789 

Ferromanganese* 1 87 1 50 

Shipments from Government stockpile, thousand 
metric tons: 

Manganese ore' 332 286 

Ferromanganese 2 

Consumption, thousand metric tons: 
Reported consumption: 3 

Manganese ore' 970 975 

Ferromanganese 2 716 803 

Apparent consumption of manganese 4 933 1,043 

Net import reliance as a percentage of apparent 
consumption 5 98 98 

* Estimated. 

' Manganese ore ranging from 35 to 54 percent manganese content. 

2 Ferromanganese ranging from 74 to 95 percent manganese content. 

3 Sum of manganese ore consumption and ferromanganese consumption 
cannot be used as total consumption, because much of the ore is consumed to 
produce ferromanganese. 

4 Thousand metric tons, manganese content (elemental manganese). 
Based on estimates of average content for all significant components except 
imports, which are reported content. 

5 Net import reliance = imports - exports + adjustments for Government 
and industry stock changes 

Source: Reference 7. 



A consortium headed by Elkem-Spigerverket of Norway 
has purchased most of Union Carbide's ferroalloy division. 
Another Norwegian consortium has recently signed a letter 
of intent to purchase ferroalloy plants owned by Ohio 
Ferro-Alloys. The Norwegian interest in U.S. plants has 
been encouraged by inflated energy costs and the limited 
availability of power in that country. Norway exports the 
majority of its ferroalloy products, and inflated freight costs 
also make it worthwhile to have a U.S. production base (6). 

Other domestic manganese ferroalloy plants have been 
purchased by companies from Mexico, South Africa, 
Belgium, and the Federal Republic of Germany (3). This 
recent trend of purchases of domestic ferroalloy capacity by 
foreign companies has greatly reduced our ability to control 
production of ferromanganese domestically. Without an 
adequate ferromanganese processing capacity, a diversified 
or secure source of ore, even in the Government stockpile, 
may not protect the United States from supply interruptions 
under normal circumstances. Of course, in the event of a 
national emergency, the Federal Government could assume 
control of plants physically located in the United States to 
the extent that national security required it. Also, in an 
emergency, limited quantities of ferromanganese could be 
produced in small blast furnaces, if necessary. 



AVAILABILITY OF DOMESTIC MANGANESE 



Many factors contribute to the economic status of a 
deposit. Capital expenditures vary from deposit to deposit 
depending upon the mining and milling methods used, as 
well as the annual capacity. Transportation distances and 
the recovery of byproducts also impact upon the incentive 
price. Although the major costs for developing the deposits 
are in the mill capital and operating costs, future improve- 
ments in beneficiation processes appear unlikely. Cost 
reductions in this area would be the most effective means of 
improving the overall economic availability of domestic 
manganese (9). 

LAND-BASED DEPOSITS 

Economic evaluations of the eight domestic deposits 
resulted in incentive prices ranging from $8 to almost $35 
per long ton unit of contained manganese. Comparing these 



prices with the current market value of $1 .70 per long ton 
unit for manganese clearly illustrates the submarginal 
nature of the domestic ores analyzed. Economically viable 
production from these deposits could not take place without 
a possible Government subsidization plan or a major 
cost-reducing advance in technology, or both. 

The annual potential production curve in figure 3 illus- 
trates the cumulative tonnages that would be available at 
specific prices for the selected years 1 985, 1 987, and 1 990. 
Under the assumptions made for this study, with preproduc- 
tion construction beginning in 1981, production would peak 
in 1987 and then begin to decline. This rapid peak and 
decline in production is best illustrated in the time-tonnage 
relationship shown in figure 4. The price range of $0 to $35 
per long ton unit of manganese includes all potential 
production available from the current domestic resources 
identified in this study. Potential annual domestic production 



_l o 

UJ0O 

Q- a; 

w Z 



0-2 



40.00 — 
35 00- 
30.00- 
25.00- 
20 00- 
15.00- 
10.00- 
5.00- 



.1985 



100 200 300 400 500 600 700 800 900 

ANNUAL RECOVERABLE MANGANESE.thousand metric tons 

FIGURE 3. — Annual production off domestic 
manganese for selected years at various 
prices. 



1,000 




1980 1982 1984 1986 1988 1990 1992 1994 1996 1996 2000 
YEAR 

FIGURE 4. — Annual production of domestic 
manganese through the year 2000, priced 
below $35 per long ton unit, in March 
1981 dollars. 



peaks at about 900,000 metric tons of recoverable manga- 
nese in 1987. Thereafter, production steadily declines as 
resources become depleted and the grades of the remaining 
producing deposits become lower. 

Future production would depend upon technologic im- 
provements that would allow for processing of even lower 
grade materials, and/or upon the availability of additional 
resources from known sources, such as ocean nodules, and 
currently undiscovered resources. The mining and process- 
ing of deep sea nodules could begin to replace diminishing 
land-based resources by the early 1990's (9). 



MANGANESE NODULES AS 
AN ALTERNATIVE RESOURCE 

Deep sea nodules of the North Pacific have an estimated 
16.3 billion metric tons of contained manganese and could 
be one potential manganese resource available to the 
United States. The assay values for the Pacific nodules 
include manganese, 25 percent, iron, 5 percent, nickel, 1 .4 
percent, copper, 1.2 percent, and cobalt, 0.2 percent (12). 

Recent U.S. legislation (Public Law 96-283) 7 authorizing 
the National Oceanic and Atmospheric Administration (U.S. 
Department of Commerce) to start issuing exploration 
licenses to companies incorporated in the United States 
should help to stimulate renewed interest in recovering the 
nodules. The law prohibits mining until 1988 in order to give 
the Law of the Sea treaty time to be ratified. 

Preliminary economic evaluations by the Bureau of Mines 
for the recovery of nodules from one of the more promising 
sites in the North Pacific shows that the nodules are 
presently submarginally subeconomic. However, the analy- 
sis indicates that, because of the high assay values and 
subsequent byproduct credits, the recovery of manganese 
from nodules would probably require a lower incentive price 
than any of the land-based deposits included in this report. It 
has been estimated that capital investments for a typical 
ocean-mining project recovering and processing approx- 
imately 1 million metric tons of nodules per year would 
require $600 to $700 million today, with operating costs for 
the recovery of manganese, copper, nickel, and cobalt 
estimated at approximately $125 per ton of nodules. The 



capital investments included will only cover the costs 
required to bring the deposit online. All costs previous to 
preproduction construction were considered to be sunk. 

Numerous uncertainties are deterrents to investment in 
ocean mining. The large financial exposure in a high-risk 
venture, unsolved legal problems relating to security of 
tenure at an ocean-mining site, and the absence of requisite 
tax policies all combine to discourage ocean-mining 
operations (5). Commercial mining of the North Pacific 
ocean nodules as an alternative to U.S. import dependence 
is probably at least 10 years away, assuming there are no 
undue delays in acquiring environmental permits for opera- 
tions at sea and for processing on land (5, 9). 

Manganese pavement and nodules of the Blake Plateau 
are located on the Outer Continental Shelf (OCS), off the 
coast of South Carolina. These occurrences are not under 
the jurisdiction of the Deep Seabed Hard Minerals Re- 
sources Act because they occur within the exclusive 
economic zone of the United States. Development of the 
Blake Plateau resources would be controlled by the OCS 
Hard Minerals Leasing Program, which is presently in the 
planning stages (12). 

The Blake Plateau deposits occur at much shallower 
depths (600-1,000 meters) than do the nodules of the North 
Pacific (3,000-5,000 meters), and they have an estimated 
tonnage of 250 million metric tons, with approximately 37.5 
million metric tons of contained manganese. The assay 
values of the pavement and nodules include manganese, 15 
percent, iron, 12 percent, nickel, 0.45 percent, copper, 0.1 
percent, and cobalt, 0.3 percent. The nodules also contain 
an average of 0.5 parts per million platinum (12). 

Recent technology research indicates that the nodules 
may be suitable for petroleum catalyst applications with 
relatively little processing. After the nodules are used as a 
catalyst, the metal values could be recovered from the spent 
material. Although the Blake Plateau nodules have been 
considered to be submarginally subeconomic, the recent 
interest in potential multiple uses for the nodules has 
improved the economic outlook for recovery (12). The 
establishment of an OCS hard minerals leasing program, 
along with an improved economic outlook, could potentially 
make recovery of the Blake Plateau resources a viable 
source of manganese for the United States. 



SENSITIVITY ANALYSES 



The following sections discuss the sensitivity analyses 
that were performed to isolate the impact of different 
variables upon the economic availability of domestic 
manganese. 

IMPACT OF BENEFICIATION COSTS 

To analyze the extent of the economic impact of 
beneficiation methods upon the availability of domestic 
manganese resources, the Three Kids Mine was evaluated 
using both the oil-emulsion flotation method and the 
ammonium carbamate leach process. Beneficiation by the 
leach process required an incentive price 1 .8 times greater 
than that required for the emulsion flotation. The leach 
beneficiation process proposed for the majority of the 
deposits in this study was found to be a major contributing 
factor to the submarginal, subeconomic nature of the 
deposits. 



7 Public Law 96-283 is the Deep Seabed Hard Minerals Resources Act, 
which was passed on June 28, 1980. Its purpose was to establish interim 
procedures for ocean resource development. The law can be overruled by a 
final treaty from the United Nations Conference on the Law of the Sea. 



Cost reductions in beneficiation methods are based upon 
technologic improvements, and a breakthrough would be 
the single most significant factor for improving the economic 
status of the domestic deposits analyzed. However, even 
reducing the incentive price for manganese by a factor of 
1 .8 does not bring any of the domestic properties within the 
range of present market values. 

IMPACT OF TRANSPORTATION COSTS 

Transportation was determined to be another major factor 
impacting the incentive price for the production of domestic 
manganese. Rail shipping costs from the mill to market were 
estimated for the manganese concentrates from all of the 
mines, except the concentrate from the Cuyuna North 
Range, which was delivered to Pittsburgh via barge. The 
differences in the required incentive prices for the eight 
mines evaluated are shown in table 9. Most of the deposits 
are a long distance from the market at Pittsburgh, and the 
amount of change that this causes in the incentive price is 
substantial compared with the present market value of 
manganese. In two cases, increases in the incentive price 
indicate that the cost of transportation exceeds the present 
average market price of $1 .70 per long ton unit of contained 



10 



TABLE 9. — Impact of transportation costs on 
the incentive prices for domestic manganese 

Approximate Change in 
Property name distance.' miles incentive price 2 

Cuyuna North Range 550 + $0.02 

Maple Mountain-Hovey Mountain 900 + .81 

North Aroostook District 1 .000 + .92 

Sunnyside Mine 1 .500 + 1 .22 

Maggie Mine 1 .900 + 1 .35 

Hardshell Mine 1.850 +1.55 

Three Kids Mine 1.900 + 2.17 

Butte District 1 ,900 + 2.38 

1 All transportation is by rail from site to Pittsburgh, Pa., except trom 
Cuyuna North Range, which is by barge. 
1 Per long ton unit. 

manganese. Transportation costs will have to be reduced or 
compensated for in some manner if most of these deposits 
are to be considered for production. 

IMPACT OF CHANGES IN BYPRODUCT PRICES 

The presence of byproducts enhances the economic 
availability of manganese. In order to show the impact of 
changes in byproduct prices, a sensitivity analysis was 
performed substituting March 1980 prices for the study 
value prices of March 1981. The analysis was done in 
March 1981 costs to avoid the influences of inflation, and 
March 1980 prices were used because they represent the 
probable high or low price fluctuations, without being 
extreme. As illustrated in table 10, the required incentive 
price for manganese fluctuates with changes in byproduct 
commodity prices. For example, as the price of silver 
dropped from $24.13 per troy ounce in March 1980 to 
$12.34 per troy ounce in March 1981, the associated 
incentive price for manganese from the Hardshell Mine rose 
27.5 percent. 

In order to ascertain the total amount of change in the 
incentive price caused by a byproduct, Maple Mountain- 
Hovey Mountain Mine was evaluated both with and without 
an iron byproduct. The benefit of the iron byproduct lowered 
the required incentive price for manganese by 9.2 percent. It 
should be noted that the actual amount of change in the 
incentive price owing to byproducts is dependent not only 
upon price, but upon the grade and amount of the 
byproduct, as well as its marketability. 

The Hardshell Mine was the most sensitive to byproduct 
price changes because of the high amount of silver 
recovered. In properties with potential byproduct recovery, 



TABLE 10. — Changes in manganese incentive 

prices as a result of changes in byproduct 

prices from March 1980 to March 1981 



Byproduct to manganese 



Property name Type 



Price 



Per 



March 
1980 



March 
1981 



Change in 

manganese 

incentive 

price.' percent 



Hardshell Mine . . . 


Silver 


Troy ounce 


$24.13 


$12.34 


+ 27.5 


Butte District 


do. 


... do ... 


24.13 


1234 


2 + 4.2 




Lead 


Pound . . 


.49 


.35 






Zinc 


. . . do . . . 


.38 


.41 




North Aroostook 


Iron . 


Metric ton 


73 66 


80 50 


1.6 


District. 












Maple Mountain- 


do. 


... do 


73.66 


80.50 


- 2.1 


Hovey Mountain. 












Cuyuna North 


do. 


. . . do . . . 


73.66 


80.50 


- 4.1 


Range. 













increased prices for those byproducts may spark an interest 
in their recovery, but, unless manganese prices also rise 
dramatically, manganese recovery could still be uneconom- 
ical. High byproduct prices may help to lower the incentive 
price for domestic manganese; however, none of the 
properties analyzed in this study became competitively 
priced with reasonable increases in byproduct prices. 

IMPACT OF STATE SEVERANCE TAXES 

In order to assess the impact of differing State severance 
taxes upon the economic availability of domestic manga- 
nese, a typical property was developed and evaluated under 
each State's tax system. This hypothetical property was 
developed assuming a 20-year production life, with 4 years 
of preproduction, and a final product grade of 66.8 percent 
manganese with no byproducts. Because of the large 
impact of transportation costs upon the incentive price, an 
average transportation distance of 1 ,450 miles by rail from 
the site to the market was assumed. 

The severance taxes applied within each State are given 
in table 1 1 . Because Maine assessed no severance tax at 
the time of this study, it was used as a base case to 
determine the percentage of change in the incentive price 
owing to severance taxes. The current State severance tax 
rates and points of incidence were employed, except in 
Minnesota, which has had no recent commercial manga- 
nese ore (35 percent or more manganese) production and 
does not presently have a tax on manganese. The 
severance tax rate assumed for all of the Minnesota 
analyses was the iron ore occupation tax. This tax would be 
applied to any byproduct iron, and it was assumed that a tax 
on manganese would be similar. 

There was a 12-percent range in the incentive price for 
manganese from the hypothetical property when it was 
evaluated within each of the six State tax systems. It can be 
seen in table 11 that, generally, as the total amount of 
severance tax paid in undiscounted dollars increases, the 
magnitude of change in the incentive price also increases. 
Because of its lack of State income and property taxes, 
Minnesota was the one exception, where the high amount of 
severance taxes paid was not clearly reflected in the change 
in incentive price. It should be noted that, as in the case of 
Minnesota, the other taxes applied to the property also have 
an impact upon the price. 

TABLE 1 1 . — Changes in incentive prices for 

manganese as a result of differing State 

severance taxes 







Severance tax 


Change in 


State 


Tax paid 1 


Tax rate, 


incentive price, 2 




(millions) 


percent Point of incidence 


percent 


Maine 





None 





Nevada 


$10.5 


1 .3 Net proceeds 3 


4 1.0 


Colorado . . . 


28.8 


2.25 Value after mining 4 . . . 


+ 5.5 


Montana. . . . 


30.8 


.5 do." 


+ 5.7 


Arizona 


43.6 


2.5 Value after milling 5 . . . 


+ 12.0 


Minnesota . . 


200.8 


15.0 Value after mining 4 . . . 


+ 8.5 



1 Price equals average total cost and includes byproduct credits. Analysis 
done in March 1981 dollars. 

2 Change of * 4.2 percent for Butte District (Emma Mine) includes revenues 
generated by the three byproducts: silver, lead, and zinc. 



' Total amount of tax paid over the 20-year producing life of the 
hypothetical property in undiscounted dollars. 

2 Maine was used as a base for determining percentage changes in 
incentive price because it assessed no severance tax at the time of this 
study. 

3 Net proceeds tax is a sliding scale tax assessed on before-tax income 
less all operating and transportation costs, depreciation, interest, expensed 
exploration and development, property tax, and royalties. 

4 Tax based on the value of the commodity after mining. The tax is 
assessed on the gross revenues of the commodity less the smelter and 
refinery operating costs, mill-to-smelter and smelter-to-refinery transportation, 
and the percentage of the total mill operating costs assigned to the 
commodity times the total mill operating costs. 

5 Tax based on the value of the commodity after milling. The tax is 
assessed on the gross revenues of the commodity less the smelter operating 
costs, refinery operating costs, and smelter to refinery transportation costs. 



11 



CONCLUSIONS 



The eight domestic manganese deposits evaluated by the 
Bureau of Mines have total demonstrated resources of 420 
million metric tons with an average grade of 10 percent 
contained manganese. These deposits were found to be 
submarginally subeconomic, requiring greater than 1.5 
times the current price or a major cost-reducing advance in 
technology in order to be considered for development. The 
possibility of a major technologic breakthrough appears 
unlikely at the present time, and these eight domestic 
deposits would probably not be developed except in the 
case of an extreme national emergency. 

The sensitjvity analyses performed indicated that benefici- 
ation costs were a major contributing factor to the economic 
status of a deposit. Improvements in this area would be the 
most effective means of reducing the cost of production. 
Transportation costs also had a large impact upon the 
incentive price for manganese. For several properties, the 
transportation costs alone were greater than the present 
market value of $1.70 per long ton unit of contained 
manganese. Byproducts and byproduct prices improved the 
economics of a deposit, but even with reasonable increases 
in byproduct prices none of the domestic deposits become 
economically viable. State severance taxes have some 
impact upon the economics, with a 12-percent range in the 
incentive price found among the six States involved in the 
study. 

Annual production of domestic ore would peak at 900,000 
metric tons of recoverable manganese in 1987 if preproduc- 
tion development began in 1981. Production from the 
domestic deposits evaluated in this study would be 
consumed as manganese ore for the production of ferro- 
manganese. Current annual consumption of manganese ore 
in the United States is approximately 975,000 metric tons. 
Given this consumption rate, production from domestic ores 
would not meet current demand. Even with the 3-year 
supply of stockpiled metallurgical-grade ore, adequate 



ferromanganese processing capacity would be required to 
process manganese ore to the final product, ferromanga- 
nese. 

Deep sea nodules of the North Pacific are a vast potential 
manganese resource available to the United States. Recent 
U.S. legislation empowering the Commerce Department to 
start issuing mining licenses to companies incorporated in 
the United States should help renew interest in recovering 
the nodules, which contain an estimated 16.3 billion metric 
tons of manganese. However, with the legal and financial 
uncertainties surrounding this vast resource, actual develop- 
ment is probably still 10 years away (9). 

Manganese pavement and nodules containing approx- 
imately 37.5 million metric tons of manganese occur on the 
Blake Plateau off the coast of South Carolina, within the 
exclusive economic zone of the United States. Development 
would be controlled by an Outer Continental Shelf Hard 
Minerals Leasing Program, which is presently in the 
planning stages. Although presently considered to be 
submarginally subeconomic, recent technology research 
indicates that the nodules may be suitable for catalyst 
applications with relatively little processing, and that the 
metal values present could be recovered after the material 
had been spent. 

In recent years, the United States has begun to import 
less manganese ore and more ferromanganese. This trend 
has been encouraged by rising costs, particularly energy 
and transportation costs, and by the ore-producing coun- 
tries, which are looking for the increased value added in 
their exports. In turn, this trend has reduced domestic 
ferromanganese production capacity. Reducing our produc- 
tion capacity has severely limited our ability to protect 
domestic industries from supply interruptions, and has made 
the United States more dependent upon foreign sources of 
ferromanganese. 



12 



REFERENCES 



1. Clement, G. K.. Jr.. R. L. Miller. P. A. Seibert. L. Avery, and H. 
Bennett. Capital and Operating Cost Estimating System Manual for 
Mining and Beneficiation of Metallic and Nonmetallic Minerals 
Except Fossil Fuels in the United States and Canada. BuMines 
Special Pub.. 1980. 149 pp. 

Also available as: 

STRAAM Engineers. Inc. Capital and Operating Cost Estimat- 
ing System Handbook — Mining and Beneficiation of Metallic and 
Nonmetallic Minerals Except Fossil Fuels in the United States and 
Canada. Submitted to the Bureau of Mines under contract 
J0255026. 1977, rev. 1978 and 1979, 374 pp.; available from the 
Minerals Availability Field Office, Bureau of Mines, Denver, Colo. 

2. Davidoff, R. L Supply Analysis Model (SAM): A Minerals 
Availability System Methodology. BuMines IC 8820, 1980, 45 pp. 

3. DeHuff, G. L. Manganese. BuMines Minerals Yearbooks, 
1970-79. 

4. DeHuff, G. L, and T. S. Jones. Manganese. BuMines Mineral 
Commodity Profile, 1979, 19 pp. 

5. Engineering and Mining Journal. Manganese, Slack Steel 
Industry Cools 1981 Price Outlook. V. 182, March 1981, pp. 
117-121. 



6. . Norwegians Eye More U.S. Ferroalloy Plants. V. 182, 

July 1981, p. 19. 

7. Jones, T. S. Manganese. Sec. in BuMines Mineral Commodity 
Summaries 1982. Pp. 94-95. 

8. National Materials Advisory Board. Manganese Recovery 
Technology. National Academy of Sciences, Washington, D.C., 
NMAB-323, 1976, 94 pp. 

9. . Manganese Reserves and Resources of the World and 

Their Industrial Implications. National Academy of Sciences, 
Washington, D.C., NMAB-374, 1981, 360 pp. 

10. U.S. Bureau of Mines. Manganese (Monthly). Mineral 
Industry Surveys, January 1980 through May 1981. 

1 1 . . Minerals and Materials — A Monthly Survey. Commodity 

Tables, April 1981. 

12. U.S. Department of the Interior. Program Feasibility Study. 
OCS Hard Minerals Leasing. Summary document, August 1979, 
180 pp.; NTIS PB 81-192551. 

13. U.S. Geological Survey and U.S. Bureau of Mines. Principles 
of a Resource/Reserve Classification for Minerals. U.S. Geol. 
Survey Circ. 831, 1980, 5 pp. 



BIBLIOGRAPHY 



1. Allen, G. L, and others. Utilization of Three Kids Manganese 
Ore in the Production of Electrolytic Manganese. BuMines Rl 3815, 
1945, 78 pp. 

2. Beltrame, R. J., R. C. Holtzman, and T. E. Wahl. Manganese 
Resources of the Cuyuna Range. East-Central Minnesota Geol. 
Survey Rl 24, 1981, 22 pp. 

3. Dean, R. S., F. D. DeVaney, and W. H. Coghill. Manganese: 
Its Occurrence, Milling, and Metallurgy. Part I. BuMines IC 6768, 
1934, 98 pp. 

4. Eilertsen, N. A. Maple Mountain-Hovey Mountain Manganese 
Project, Central District, Aroostook County, Maine. BuMines Rl 
4921, 1952, 118 pp. 

5. Johnson, A. C, and R. R. Trengove. The Three Kids 
Manganese Deposit, Clark County, Nev.: Exploration, Mining, and 
Processing. BuMines Rl 5209, 1956, 31 pp. 

6. Kumke, C. A., C. K. Rose, F. D. Everett, and S. W. Hazen, Jr. 
Mining Investigations of Manganese Deposits in the Maggie 
Canyon Area, Artillery Mountains Region, Mohave County, Ariz. 
BuMines Rl 5292, 1957, 87 pp. 



7. Lasky, S. G., and B. N. Webber. Manganese Resources of the 
Artillery Mountains Region, Mohave County, Ariz. U.S. Geol. 
Survey Bull. 961, 1949, 86 pp. 

8. McKelvey, V. E., J. H. Weise, and V. H. Johnson. Preliminary 
Report on the Bedded Manganese of the Lake Mead Region, 
Nevada and Arizona. U.S 4 Geol. Survey Bull. 948-D, 1949, pp. 
83-101. 

9. Miller, R. L. Manganese Deposits of Aroostook County, Maine. 
Maine Geol. Survey Bull. 4, 1947, 62 pp. 

10. Pavlides, L. Geology and Manganese Deposits of the Maple 
and Hovey Mountains Area, Aroostook County, Maine. U.S. Geol. 
Survey Prof. Paper 362, 1962, 115 pp. 

11. Prasky, C, R. L. Marovelli, and F. E. Joyce, Jr. Evaluating 
Cuyuna Manganese Resources by Sulfatizing. BuMines Rl 5887, 
1961, 27 pp. 

12. Young, W. E. Manganese Occurences in the Eureka-Animas 
Forks Area of the San Juan Mountains, San Juan County, Colo. 
BuMines IC 8303, 1966, 52 pp. 



13 



APPENDIX A.— DESCRIPTION OF THE DEPOSITS 



Manganese ore of the Hardshell Mine in Arizona occurs 
as replacements of fault gouge and silicified breccia and is 
believed to be hydrothermal in origin. The fault zone dips 
north at 35 to 40 degrees, and the lode is 3 to 18 meters 
thick. The average dimensions of the mineralization are 460 
meters long, 275 meters wide, and 18 meters thick. The 
average depth to mineralization is 60 meters. The primary 
manganese minerals are pyrolusite, braunite, psilomelane, 
and wad. Silver halides are also present, as are other lead 
and zinc minerals. 

The Maggie Mine, also located in Arizona, consists of 
alluvial-fan and playa deposits of early' Pliocene age. The 
average depth to the mineralization is 177 meters, with 
average dimensions of the mineralization of 1,140 meters 
long, 720 meters wide, and 57 meters thick. The principal 
manganese minerals include psilomelane, wad, manganite, 
and pyrolusite. 

The Sunnyside Mine in southwestern Colorado occurs in 
steeply dipping veins and breccia zones with mineralized 
widths up to 18 meters. The average dimensions of the 
deposit are 1,850 meters long, 610 meters wide, and 4.6 
meters thick, with an average depth to mineralization of 50 
meters. The primary manganese minerals are rhodonite and 
rhodochrosite. 

The Maple Mountain-Hovey Mountain deposit in Aroos- 
took County, Maine, occurs as a complex folded syncline 
with some faulting along the crests of Maple and Hovey 
Mountains. A mantle of glacial drift about 1 meter thick 
covers most of the deposit, but ore outcrops on the ends of 
the syncline near the crests of the mountains. The deposit is 
about 2,400 meters long and ranges in width from about 61 
meters at the southwest end to 910 meters at the northeast 
end, and it is known to extend to 470 meters below the 
surface. The deposit occurs as a fine-textured manganif- 
erous silicate sedimentary series of manganiferous hemati- 
tic slates enclosing a banded manganiferous hematite 
horizon. The primary manganese minerals are rhodochro- 
site, braunite, bementite, rhodonite, and spessartite. 

The North Aroostook District in Maine contains 11 
deposits. The Dudley and Gelot Hill deposits included in this 
study are sedimentary beds enclosed in shales and 



limestones, which have experienced low-grade metamorph- 
ism. Manganese-bearing strata may have dips greater than 
60 degrees and extend to depths of more than 305 meters. 
The ore zones average 15 meters in thickness, and glacial 
drift about 1 .8 meters thick covers most of the area. Dudley, 
the largest of the deposits in the district, measures about 
1,830 meters long and 46 meters wide, and extends to 
depths greater than 366 meters. Braunite, bementite, and 
manganiferous carbonates are the most abundant manga- 
nese minerals. 

The manganese deposits of the Cuyuna North Range in 
Minnesota consist of complexly folded and slightly meta- 
morphosed sedimentary rocks with accompanying igneous 
flows. The deposits are steeply dipping and erratically 
oxidized in varying degrees to depths of 244 meters. Glacial 
drift averaging 20 to 45 meters in thickness covers most of 
the deposits, which range in thickness from 3 to 185 meters; 
and the majority of the resources occur within 60 meters of 
the surface. Manganiferous limonite, psilomelane, and 
manganite are the primary manganese minerals. 

The Emma Mine deposit of the Butte District in Montana 
occurs as veins up to 30 meters wide in isolated blocks of 
old workings. The dimensions of the footwall vein are 4 to 6 
meters wide, 1 ,200 meters long, and 600 meters deep. The 
dimensions of the hanging wall vein are 4 meters wide, 400 
meters long, and 200 meters deep. Rhodochrosite and 
rhodonite are the principal manganese minerals and occur 
with silver, lead, and zinc minerals. 

The Three Kids deposit in Nevada is in a graben on the 
northwest flank of the River Mountains in Clark County. 
Block faulting has broken the deposit into several ore 
bodies. The upthrown sides of the fault blocks were 
exposed to erosion that removed a large portion of the 
manganiferous material. The tabular manganiferous bed 
ranges from 30 to more than 1,100 meters in width. The 
manganiferous zone is up to 40 meters thick with an 
average overburden depth of 26 meters. The manganese 
within the tabular bodies occurs in lenses and pods, and as 
bedded nodules. Principal manganese minerals include 
wad, psilomelane, and pyrolusite. Minor amounts of copper, 
lead, zinc, and silver are associated with the manganese. 



14 



APPENDIX B.— PROPOSED MINING METHODS 



The following proposed mining methods used to evaluate 
the domestic deposits are either a continuation of a prior 
mining operation or the mining method chosen by an 
evaluator to be the most feasible. 

The Hardshell and the Maggie Mines would be mined by 
room-and-pillar methods. Twin boom jumbos, jackleg drills, 
and stopers would be used for development and production 
drilling. Ammonium nitrate-fuel oil (AN-FO) would be used 
for blasting. At the Hardshell Mine, LHD's would be used for 
loading, hauling, and dumping the ore. Broken ore would be 
dumped through grizzlies into the ore storage pocket, which 
would automatically load the skip at the skip loading station. 
Development would include sinking one shaft for production 
and service, and one shaft for ventilation. At the Maggie 
Mine, blasted ore would be transferred by LHD's from the 
rooms to the main haulageway where the ore would be 
crushed in a gyratory crusher. The crushed ore would then 
be transported by a conveyor out the main portal to a 
storage area. A front-end loader would load the stored ore 
into rear-end dump trucks to be hauled to the mill. 

The Sunnyside Mine's current lead, zinc, and gold mining 
would be expanded to include manganese ore. Uncaved old 
openings would be mined by slabbing, and the manganese 
ore in the operating section of the mine would be selectively 
mined by overhand shrinkage stoping after the base metal 
ores are stoped. Ore would be blasted with AN-FO, drawn 
from the stope, and slushed down an ore chute into ore 
cars. It would be transported by locomotives (diesel and 
battery-operated) and dropped into ore cars on the 
American Tunnel level. Then ore would be transported out 
the American Tunnel and trucked from the mine portal to the 
mill. 

The Maple Mountain-Hovey Mountain and Dudley and 
Gelot Hill deposits of Aroostook County, Maine, would be 
mined from an open pit, using shovels for excavation and 
trucks for hauling the waste and the ore to the mill. Drill rigs 
and AN-FO would be used to break up the ore. Develop- 



ment would include building access roads, removal of trees, 
clearing of stumps and vegetation and of overburden 
including stockpiling topsoil. 

The deposits in the Cuyuna North Range would be mined 
from an open pit, using electric shovels for excavation and 
rear-end dump trucks for hauling the ore and waste. 
Overburden, waste, and ore would be drilled and blasted. 
Ore from some open pits would be hauled by truck to the 
mill, while ore from other pits would be loaded onto trains 
from trucks for transport to the mill. Development would 
include pumping out water from the old open pits, removal 
of trees, clearing of stumps and vegetation, and removal of 
overburden. 

The Emma Mine of the Butte District would be mined from 
old workings using cut-and-fill stoping by proceeding up the 
dip from the haulage level. Ore would be removed from the 
full length of the block by backstoping. Broken ore would be 
slushed down chutes into ore cars on the haulage level. 
Battery-powered trains would transport the ore to an ore 
pocket at the shaft. From there the ore would be hoisted 
from the ore pocket to the surface and hauled by truck to the 
mill. Waste rock would be removed and transported in the 
same manner as the ore, except waste rock would be 
hauled to the Berkeley pit waste disposal area. After each 
slice of ore is taken from a stope, sandfill for ground support 
would be pumped into the excavation. Development would 
include pumping out water from the flooded old workings, 
sinking a concrete-lined circular shaft and driving drifts and 
raises. 

The Three Kids Mine would be mined by extending old 
open pits northward from existing high walls. Overburden 
would be removed by electric shovels and hauled by truck to 
stacking areas for future backfill in the pits. All overburden 
except alluvial gravel would be drilled and blasted. Ore 
would be loaded with front-end loaders and hauled by truck 
to the mill. 



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